Dec 29 - Class Notes

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Essentials questions that a business plan has to address:

Who are your customers ? Who are not your customers?

What are your customers unmet needs? How are they meeting the needs now? Does the present way hurt?

What is essence of your new product as a solution?

How will customer benefit form your product? Quantify

How will business make money? Who will pay you?

How large is the addressable market? Who are your most direct competitors? How does your product compete?

How will you leverage your asset and competencies?

How to involve customers in creating better products?

Can the new business generate sustainable high profits?

New Product Business Plan:

Clear , Fact-based executive summary

Present/Justify new business model

show how will you reach buyers and convert

Identify who will implement the plan : Right people can workaround the issues and make it happen quickly

Risks & How they are covered

Show it fits the firm's business goals

Show few and the most critical numbers : Ex., Cost of Delivery ; Pricing Options ; Volume of Delivery;

Show Homework - Answer all the obvious questions and put it in the slides

Build credibility of the product and Team

NPD Concept :

Customer Need => Technological Possibility => Feasibility => Viability=> Prototype => Launch

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Usual Mistakes in NPD Business Plans: Product related

Lack of in-depth understanding of Customers

Choosing convenient markets rather than the best

Going for "me-too" rather than value creation

Going for large segment, rather than niche segment

Not looking at quality from customer's viewpoint

Not giving sufficient pricing options to Buyers

Under-pricing rather than value-pricing

Not doing what really gets you the customers

Usual Mistakes in NPD Business Plans: Cost related

Unjustified capital requirements

Pay high salaries

High Fixed cost

Not doing trials- Cost-Volume-Profit Analysis